Cascade Simulation — Disruption Propagation Through the AI Compute Supply Chain

Gringras, David

Scrutica

Graph written 2026-09-06

Cascade

A single supplier failure, walked outward through the firms that depend on it.

The cascade engine propagates a failure over 14,937 supplier–customer edges across 5,080 organizations

The cascade engine

Scenario definitions

The reach curve. Organizations ranked by the number of other organizations connected downstream within 3 supplier–customer links. Multiple paths to the same organization count once.

This count uses the publicly inspectable relationships. The simulation also uses licensed relationships, so it can reach additional organizations. Here, every downstream organization is counted regardless of dependency strength. In the simulation, inclusion depends on dependency weights and an impact cutoff.

Some relationships are historical, including links to companies since acquired or dissolved.

Open the cascade engine

Across this graph, an organization has an average of 1.8 downstream organizations within one link, 10 within two, and 32 within three. Within three links, 117 organizations connect to at least 100 others downstream; 305 have none recorded. These counts do not account for the strength of a dependency or the availability of substitutes. How propagation is derived

Graph coverage

14,937: relationships used in simulations across 5,080 organizations.
2,816: publicly inspectable relationships across 1,498 organizations, available in the graph and download. These are the relationships used to calculate the reach curve. Additional licensed relationships are included in simulations but cannot be redistributed.
18,980: source records, including 4,043 that either duplicate another source’s record of the same relationship or record an unnamed counterparty aggregate.

The pre-built scenarios 20 seeds

Severity is the impact magnitude at the seed; decay attenuates it per supply-chain hop, and every decay value is editorial (Tier 4). Severities are sourced from SEC 10-K filings, USGS Mineral Commodity Summaries and TrendForce, IDC and SemiAnalysis reporting, with editorial assessments where no primary source exists.
Scenario	Category	Seed nodes	Severity	Tier	Decay
TSMC Taiwan Disruption	Natural disaster	TSMC	1.00	T4	0.90
ASML Export Halt	Export control	ASML	1.00	T1	0.95
US–China Full Decouple: Revenue Impact	Geopolitical	NVIDIA, AMD, Intel, Qualcomm Inc	0.15	T1	0.70
US–China Full Decouple: Access Denial	Geopolitical	SMIC, Huawei Technologies, Baidu, ByteDance, Alibaba, Tencent Holdings Ltd.	0.55	T3	0.80
CoWoS Advanced Packaging Bottleneck	Supply bottleneck	TSMC	0.40	T2	0.70
SK Hynix HBM Disruption	Supply bottleneck	SK Hynix	0.60	T2	0.80
EDA Export Restriction	Export control	Synopsys, Cadence	0.90	T3	0.80
Chiplet Assembly Disruption	Supply bottleneck	TSMC, Synopsys, Cadence	0.80	T4	0.75
Helium Supply Crisis (Hormuz)	Supply bottleneck	Samsung, SK Hynix, TSMC	0.65	T1	0.75
InP/EML Laser Shortage	Supply bottleneck	Coherent, Lumentum Holdings	0.85	T2	0.80
ABF Substrate Monopoly (Ajinomoto)	Supply bottleneck	Ajinomoto Co., Inc.	0.90	T1	0.95
Gallium/Germanium Restriction (Nov 2026)	Geopolitical	Coherent, Skyworks Solutions, Qorvo, Wolfspeed, Infineon Technologies	0.70	T1	0.65
CoWoS 2026 Allocation Constraint	Supply bottleneck	TSMC	0.85	T1	0.85
Japan Semiconductor-Input Seismic Shock (Korea coupling)	Natural disaster	Shin-Etsu, SUMCO, Tokyo Electron, Advantest, Disco, Lasertec, Tokyo Ohka Kogyo, Resonac Holdings, Kioxia	0.70	T4	0.82
Allied Coordination: TSMC Advanced Node Restriction	Policy intervention	TSMC	1.00	T4	0.90
EDA License Restriction: China Entity List Expansion	Policy intervention	Synopsys, Cadence	0.95	T4	0.80
Netherlands DUV Export Restriction to China	Policy intervention	ASML	0.70	T4	0.85
China Critical Minerals Retaliatory Restriction	Policy intervention	Coherent, Skyworks Solutions, Qorvo, Wolfspeed, Infineon Technologies	0.70	T4	0.65
Multilateral Cloud Compute Access Restriction	Policy intervention	Amazon.com, Inc., Microsoft Corporation, Alphabet, Oracle Corporation	0.80	T4	0.75
Netherlands EUV Restriction: Allied Countries Only	Policy intervention	ASML	1.00	T4	0.95

Related research

Epoch’s analysis of the CoWoS packaging and HBM memory chokepoint documents the concentration at both ends of the supply relationship: NVIDIA, Google, AMD and Amazon on the demand side; TSMC, SK Hynix, Samsung and Micron on the supply side. Relationships of that kind are the edges the simulator above propagates over.